Finland: Post-graduate degree is VAT-exempt | KPMG | GLOBAL

Finland: Post-graduate degree offered by UK university is VAT-exempt

Finland: Post-graduate degree is VAT-exempt

Finland’s Supreme Administrative Court held that services of a post-graduate degree offered in Finland by a UK university are exempt from value added tax (VAT) in Finland.

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The case identifying information is: KHO 2017:79 (11 May 2017)

Background

A university domiciled in the UK offered masters of business administration (MBA) degrees to individuals in Finland. The university’s operations were regulated by UK law and were supervised by the UK Quality Assurance Agency, which also determined the content of the MBA degree. Most of the university’s funding consisted of public funding, tuition fees, and research aids.         

  • In the UK, the MBA degree offered by the university was regarded as an official degree, and as such, was not subject to VAT or corporate income tax. 
  • In Finland, MBA degrees are regarded as “additional education,” and are not a part of the official degree system, and do not qualify as educational services as defined by the VAT law. The provision of “MBA services” in Finland is subject to VAT. 

Court decision

The court held that in light of the requirements of non-discrimination and equality under provisions of EU law, the MBA services provided by the UK university were comparable to educational services as defined in the Finnish VAT law and thus would be exempt from VAT. 

KPMG observation

Among the significant factors in the case were findings that the MBA degree was a higher academic degree regulated by UK law, that the university received public funding, and that it was supervised by an official authority.  

Tax professionals with KPMG in Finland observed that the decision establishes precedence regarding the qualification of VAT-exempt educational services. In addition to MBA degrees, the views adopted by the court seem to support uniform treatment of other educational services and degrees offered in Finland by universities domiciled in other EU Member States. 

 

For more information contact a tax professional with the KPMG member firm in Finland:

Kristiina Äimä | +358 20 760 3698 | kristiina.aima@kpmg.fi

Suvi Collin | +358 20 760 3169 | suvi.collin@kpmg.fi

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